The Strategist

Powell: US economy is recovering faster than expected

10/07/2020 - 04:21

The US economy is recovering from the coronavirus pandemic faster than expected, but the virus is still causing extreme uncertainty about the outlook, said Jerome Powell, head of the US Federal Reserve on Tuesday.

"The recovery is moving faster than expected. The latest forecasts from the Federal Open Market Committee participants at our September meeting showed that the recovery continues at a steady pace," he said at the annual meeting of the National Business Economics Association.

However, he said the forecast is still "extremely unreliable", partly because it depends on the spread and consequences of the coronavirus. Powell acknowledged the risks that this could delay a full recovery.

"One of these risks is that the number of COVID-19 infections could rise again to levels that more severely limit economic activity, not to mention the tragic consequences for lives and well-being," said the Fed's head.

The second risk is that a prolonged slowdown in recovery over time could lead to a normal recessionary trend.